Central banking reform and overcoming the moral hazard problem: the case of Brazil
Autor(a) principal: | |
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Data de Publicação: | 2001 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Revista de Economia Política |
Texto Completo: | http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572001000300407 |
Resumo: | ABSTRACT The implicit assumption that governments will bailout financial institutions under distress can generate negative incentives for the development of a sound financial system. This paper begins from the premise that these negative incentives, which create a situation of moral hazard, is essentially a political problem rather than a technical problem over generating correct institutional incentives. In the Brazilian case, we argue the current administration of Fernando Henrique Cardoso was only able to significantly reduce its moral hazard problem in the financial sector through distancing its political relationship with two important political actors: the private financial sector and state governors. The ability of the government to eliminate the implicit assumption of an eventual Central Bank bailout over public and private commercial banks was only made possible through a series of political conditions, which includes the end of hyper-inflation under the Real Plan, that reduced the government’s dependence upon those two important political actors. |
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Revista de Economia Política |
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Central banking reform and overcoming the moral hazard problem: the case of BrazilCentral Bank autonomyfinancial systembanksmoral hazardpolitical economyABSTRACT The implicit assumption that governments will bailout financial institutions under distress can generate negative incentives for the development of a sound financial system. This paper begins from the premise that these negative incentives, which create a situation of moral hazard, is essentially a political problem rather than a technical problem over generating correct institutional incentives. In the Brazilian case, we argue the current administration of Fernando Henrique Cardoso was only able to significantly reduce its moral hazard problem in the financial sector through distancing its political relationship with two important political actors: the private financial sector and state governors. The ability of the government to eliminate the implicit assumption of an eventual Central Bank bailout over public and private commercial banks was only made possible through a series of political conditions, which includes the end of hyper-inflation under the Real Plan, that reduced the government’s dependence upon those two important political actors.Centro de Economia Política2001-09-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572001000300407Brazilian Journal of Political Economy v.21 n.3 2001reponame:Revista de Economia Políticainstname:EDITORA 34instacron:EDITORA_3410.1590/0101-31572001-1252info:eu-repo/semantics/openAccessSOLA,LOURDESGARMAN,CHRISTOPHER DA CUNHA BUENOMARQUES,MOISÉS S.eng2021-06-29T00:00:00Zoai:scielo:S0101-31572001000300407Revistahttps://centrodeeconomiapolitica.org.br/repojs/index.php/journalONGhttps://centrodeeconomiapolitica.org.br/repojs/index.php/journal/oai||cecilia.heise@bjpe.org.br1809-45380101-3157opendoar:2021-06-29T00:00Revista de Economia Política - EDITORA 34false |
dc.title.none.fl_str_mv |
Central banking reform and overcoming the moral hazard problem: the case of Brazil |
title |
Central banking reform and overcoming the moral hazard problem: the case of Brazil |
spellingShingle |
Central banking reform and overcoming the moral hazard problem: the case of Brazil SOLA,LOURDES Central Bank autonomy financial system banks moral hazard political economy |
title_short |
Central banking reform and overcoming the moral hazard problem: the case of Brazil |
title_full |
Central banking reform and overcoming the moral hazard problem: the case of Brazil |
title_fullStr |
Central banking reform and overcoming the moral hazard problem: the case of Brazil |
title_full_unstemmed |
Central banking reform and overcoming the moral hazard problem: the case of Brazil |
title_sort |
Central banking reform and overcoming the moral hazard problem: the case of Brazil |
author |
SOLA,LOURDES |
author_facet |
SOLA,LOURDES GARMAN,CHRISTOPHER DA CUNHA BUENO MARQUES,MOISÉS S. |
author_role |
author |
author2 |
GARMAN,CHRISTOPHER DA CUNHA BUENO MARQUES,MOISÉS S. |
author2_role |
author author |
dc.contributor.author.fl_str_mv |
SOLA,LOURDES GARMAN,CHRISTOPHER DA CUNHA BUENO MARQUES,MOISÉS S. |
dc.subject.por.fl_str_mv |
Central Bank autonomy financial system banks moral hazard political economy |
topic |
Central Bank autonomy financial system banks moral hazard political economy |
description |
ABSTRACT The implicit assumption that governments will bailout financial institutions under distress can generate negative incentives for the development of a sound financial system. This paper begins from the premise that these negative incentives, which create a situation of moral hazard, is essentially a political problem rather than a technical problem over generating correct institutional incentives. In the Brazilian case, we argue the current administration of Fernando Henrique Cardoso was only able to significantly reduce its moral hazard problem in the financial sector through distancing its political relationship with two important political actors: the private financial sector and state governors. The ability of the government to eliminate the implicit assumption of an eventual Central Bank bailout over public and private commercial banks was only made possible through a series of political conditions, which includes the end of hyper-inflation under the Real Plan, that reduced the government’s dependence upon those two important political actors. |
publishDate |
2001 |
dc.date.none.fl_str_mv |
2001-09-01 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572001000300407 |
url |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0101-31572001000300407 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
10.1590/0101-31572001-1252 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
text/html |
dc.publisher.none.fl_str_mv |
Centro de Economia Política |
publisher.none.fl_str_mv |
Centro de Economia Política |
dc.source.none.fl_str_mv |
Brazilian Journal of Political Economy v.21 n.3 2001 reponame:Revista de Economia Política instname:EDITORA 34 instacron:EDITORA_34 |
instname_str |
EDITORA 34 |
instacron_str |
EDITORA_34 |
institution |
EDITORA_34 |
reponame_str |
Revista de Economia Política |
collection |
Revista de Economia Política |
repository.name.fl_str_mv |
Revista de Economia Política - EDITORA 34 |
repository.mail.fl_str_mv |
||cecilia.heise@bjpe.org.br |
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1754122479681404928 |